On September 9, 2025, Justice K. S. Garewal (Retd.) of the Punjab and Haryana High Court, acting as a sole arbitrator, issued an award in the arbitration case between M/s. Proactive In & Out Advertising Pvt. Ltd. (the claimant) and Pepsu Road Transport Corporation (PRTC) (the respondent). The case, Arbitration Case No. 18 of 2024, addressed a dispute arising from two advertising contracts between the parties. The arbitrator’s award directed PRTC to pay Proactive in compensation, plus an amount in arbitration costs, and denied all other claims.
Background
The dispute centered on a lack of promised advertising space on PRTC buses. Proactive, an outdoor advertising company, was a concessionaire for PRTC, responsible for generating non-aeronautical revenue through advertisements.
The first contract, which ran from June 12, 2017, to June 11, 2020, involved Proactive displaying advertisements on 898 buses. Proactive claimed that a significant portion of the advertising space, specifically the luggage carriers, was unavailable or unfit for use, with approximately 75% of the buses lacking them. Proactive consistently raised these issues, formally beginning in the fourth quarter through a letter dated March 12, 2018, and requested either permission to use the side panels or pro-rata compensation. After nearly 18 months, on December 4, 2018, PRTC acknowledged that 300 out of 898 buses were missing luggage carriers and granted a rebate per quarter for three quarters and extended the contract by three months and 12 days. Proactive, however, considered this compensation insufficient.
The arbitrator found that all claims related to the first contract were time-barred because Proactive had filed its arbitration notice on November 30, 2023, more than three years after the contract ended on September 23, 2020. The arbitrator also concluded that the rebates and extensions offered under the first contract constituted sufficient compensation by agreement between the parties.
The Second Contract and Unjustified Withdrawal
The second contract, which ran from September 24, 2020, to September 23, 2023, was a three-year extension of the original agreement. Proactive claimed it was “forced” to accept an unreasonable 12% fee increase due to the financial duress caused by the COVID-19 pandemic. Despite this, Proactive continued to face issues with unsuitable advertising space, including number plates on the back panels of 79 additional buses.
In January 2021, Proactive requested a waiver of license fees for six months due to the pandemic and an extension of nine months without payment to compensate for other issues. In response, PRTC agreed to an eight-month extension from September 24, 2023, to May 23, 2024, without a license fee. However, PRTC subsequently cancelled this eight-month extension via a notice on August 23, 2023, citing “financial loss to PRTC”. After Proactive responded with a 12-page letter, PRTC only granted a three-month extension, which Proactive accepted.
The arbitrator determined that PRTC’s unilateral decision to reduce the eight-month extension to three months was “devoid of any merit whatsoever” and constituted an unfair termination. The arbitrator’s rationale was that Proactive’s own self-assessed compensation was the most appropriate measure of damages, and PRTC had initially agreed to it.
The Award
Based on the unjustified withdrawal of the five remaining months of the eight-month extension, the arbitrator calculated Proactive’s compensation.
The arbitrator ordered PRTC to pay Proactive with 12% annual interest from December 24, 2023, until the date of payment. In addition, PRTC was ordered to pay arbitration costs, including the arbitrator’s and counsel’s fees. All other claims made by Proactive, including claims for excess payments and lost profits, were denied.
